Investors can buy the units of DSPBR Equity Fund, considering the fund’s track record in delivering strong returns and its ability to contain downsides quite well during periods of market volatility.

DSPBR Equity invests in stocks across market capitalisation segments — large, mid and small — taking advantage of any particular momentum in the market.

The fund has beaten its benchmark, the Nifty, consistently over a one-, three- and five- year period. Over a five-year period, the fund has delivered a compounded annual return of nearly 21 per cent that places it among the top few funds in the diversified category.

DSPBR Equity may be held as part of the core portfolio of investors, who look to outperform the benchmark during market upswings and protection from heavy downsides during bear markets.

Performance and strategy: The fund has been in existence for nearly 12 years. During the market upswings in 2003, 2005 and 2007, the fund outperformed its benchmark by a huge margin.

Considering DSPBR Equity’s flexi-cap approach, if one were to compare it against the CNX 500 as a benchmark, the former has demonstrated superior performance, a feat not easy to achieve.

During periods of market volatility, especially prolonged ones such as the one in 2004, or the whole of 2008, the fund has managed to protect the fall in its NAV better than its benchmark.

Its track record on short volatile periods is mixed; while it contained downsides in 2007, the same was not possible in 2006.

For investors looking at longer timeframes of at least 3-5 years, either the lump-sum or the systematic investment route may be options, depending on their surplus.

DSPBR Equity has a higher allocation to mid-cap stocks (less than Rs 5,000 crore market capitalisation) compared to funds such as Birla Sun Life Equity and HDFC Growth. The fund now has over 25 per cent of the portfolio invested in such stocks.

During the bull-run of 2003-07, the mid-cap allocation was over 35 per cent, which was one of the reasons for the fund’s good performance as mid-caps made bountiful gains during this period.

A large-cap intensive approach may be desirable in the present environment, as these stocks may be the first to recover when the current market volatility ends. The cash/debt component in the portfolio has been consistently little over 10 per cent , which suggests that the fund prefers to remain invested in equities albeit with large diversity rather than sit on cash and wait for opportunities.

Portfolio: The number of stocks in the portfolio has been trimmed over the last one year. From over 80 stocks over a year ago, the number of stocks in the portfolio in February 2009 is 67.

The diversification in terms of sectors invested is quite high, with as many as 26 of them in the portfolio. Further the fund appears to have adopted a defensive approach in recent times with consumer non-durables, pharmaceuticals and software being among the top few sectors held. – Hindu Business Line.

The fund is managed by Mr Apoorva Shah.

Investors can consider adding the HSBC Dynamic Fund to their portfolio. Though the fund is relatively new , it has done well to contain its downside in turbulent markets. Not only has it significantly outpaced its benchmark, the BSE 200 but it has also bettered its returns over some of the well-established large-cap funds such as Kotak 30 and Sundaram BNP Paribas Select Focus. While a good part of this outperformance can be credited to the fund’s high debt exposure, the fund’s mandate allows it to even switch completely to debt: investors should note that the high debt could limit returns when the markets look up again. On that note, the fund’s flexibility in switching to and from equity to debt also gives it a significant edge over balanced funds. This also spares investors from incurring entry and exit loads if they were to dynamically switch between equity and debt funds themselves.

Performance

In the last one year, HSBC Dynamic’s NAV has fallen by over 43 per cent, while that of its benchmark, the BSE 200, declined by over 53 per cent. The fund’s mandate that allows making tactical asset allocation calls appears to have come to its rescue. While that does make the fund reliant on the fund manager’s ability to get dynamic asset allocation calls right, it has acquitted itself well in this respect.

As early as June 2008, the fund had increased its debt exposure to 31.5 per cent. Such a high exposure to debt would have helped it pre-empt the impact of the equity fall that followed in October. Having the ability to make such dynamic asset allocation calls may also help the fund deliver returns better that that of balanced funds, which have a fixed asset allocation strategy (65-35 equity-debt). Its one-year returns lag that of balanced funds such as HDFC Prudence only marginally.

So, while the debt exposure will help the fund score over pure equity funds in the markets such as these, it may lag their returns if and when the markets turn around. In the brief four-month stint that fund had in the bull market, during September 2007-January 2008, the fund just about managed to keep pace with its benchmark.

Portfolio

In the equity portion of the fund’s portfolio, which makes up for 74 per cent of its total assets, it is the large cap stocks that find greater prominence, making up for about 54 per cent of the assets.

Mid and small-cap stocks contribute to over 10 per cent and 9 per cent, respectively. In terms of sector allocation, the fund has the highest presence in consumer non-durables, followed by that in banks and pharmaceuticals. With respect to its debt allocation, while the overall exposure to debt has moderated in recent months, it still is significant, at about 15 per cent.

Nothing much fascinating this year for the Indian Stock Markets. In the third week of the year market saw a night mare. Except that we saw many stocks reaching their lifetime high in Jan first and second week. Third week onwards investors started loosing their money as there we two consecutive lower circuits on 21 and 22 on Indian Markets.

Since the peek of some 21K markets fell at 7800 odd and now are at 9K levels. It lost its shine as it looses 60% in not even a year.

Dalal Street turned into Halal Street.

I doubt if any one booked their full profits.

This year we saw both the phases of the stock markets – Bull Market (for 15 days odd) and rest of the year bear phase.

Just don’t forget – “Every thing which has gone up has to come down again”

There are many more things, but these are the once which I think are of immense importance.

Sectors which Outperformed.

I can say none of them all are in red.

The worst hit sectors.

Reality / Infrastructure.

Metals.

Auto.

Airline.

Stocks which declared good dividend.

Disa India declared 2000% dividend on a face value of Rs. 10

Colgate Palmolive declared 900% on a face value of Re. 1

Best Performing Mutual Funds of the year – Download File

People staying in Mumbai if you want to invest in Mutual Funds pls do contact here.

Happy New Year 2009.

Happy Investing!

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]]> http://www.moneygain.in/2008/12/31/best-and-worst-of-2008-for-the-indian-stock-markets/feed/ 0 http://www.moneygain.in/2008/12/27/birla-sun-life-mutual-fund-adds-insurance-feature-to-its-scheme/ http://www.moneygain.in/2008/12/27/birla-sun-life-mutual-fund-adds-insurance-feature-to-its-scheme/#comments Sat, 27 Dec 2008 14:32:00 +0000 Chirag http://www.indianmoneyplus.com/?p=381

Birla Sun Life Mutual Fund has added the facility of insurance in its Birla Sun Life Tax Relief 96 scheme. The facility would provide investors insurance upto Rs.10 lakhs till the age of 55 years against nine critical diseases. Birla Sun Life Tax Relief is an open ended equity linked scheme; the dividend option under the scheme was launched in 1996 while the growth option under the same scheme was launched in 2008. The objective of the scheme is to provide growth of capital along with Income Tax exemption benefits to investors. The scheme is managed by Mr. Ajay Garg and it is benchmarked against BSE 200. – MutualFundIndia

A Reuters poll says that mainly large caps stocks are a attraction of domestic Mutul Funds Companies.

Reeling under the liquidity pressure, the mutual fund industry could see more bailout deals — similar to the takeover of Lotus India Asset Management — in the coming days, say industry experts.
“One or two more such kind of transactions may be seen in days ahead but that will mainly be for bailing out some problem-ridden fund houses,” MF tracking firm Value Research CEO Dhirendra Kumar said.
Value Research chief Kumar said, “The outlook for the mutual funds industry remains grim for the next two years and fixed income plans would come under pressure. The days ahead will also see mutual funds reinventing themselves to be more focussed on retail investors.”
Mutual fund industry has been under pressure for last two quarters and both the Reserve Bank and the Finance Ministry are ceased of the liquidity problem faced by the industry.

In order to provide liquidity to the cash-starved industry RBI last month opened a special repo window for the banks aggregating Rs 20,000 crore for on-lending to the industry.

The lackluster response from banks to pick up funds from this window forced the RBI to extend the window the limit is exhausted.
Further reading Economic Times. Mergers and Accuasion

By number of funds as well as money invested, one of the most important type of mutual fund in India is something that is generally called a Fixed Maturity Plan. Of the 1920 mutual funds that are currently available, no fewer than 805 are FMPs, as they are known. And of the Rs 5.61 lakh crore that is invested in Indian mutual funds today, 68,000 crore is in FMPs. FMPs are generally used by companies and large investors as an alternative to bank fixed deposits. In general, these funds resemble FDs more than they do other mutual funds. These are closed-end funds, meaning that one can only enter them when they are launched and exit them when their pre-stated term is over. Actually, one can exit them earlier, but generally after paying a load that is high enough to be a serious discouragement. More importantly, fund companies offer an ‘indicative return’ for FMPs. Unlike other types of mutual funds, FMPs are run in such a way that this indicative return actually has some meaning.

FMPs invest in debt instruments with the intent of holding them to maturity. This means that regardless of any ups and downs in the market value of the investments, the final earnings are predictable. Therefore, the indicative returns that FMPs provide to investors reflect the reality.

One obvious question is why investors should prefer FMPs to bank deposits. The reason is mostly to do with tax efficiency. When you put money in a fixed deposit, the interest gets added to your income. In FMPs longer than a year, if you elect to take all your gains as capital appreciation, the taxation is merely 10 per cent with indexation benefit or 20 per cent with indexation. That’s generally quite a saving from the tax rate which either individuals or companies would pay on the interest earned from a bank deposit.

Even for investments less than a year, there’s a tax advantage if the investor takes the option of receiving the gains in the form of dividends. In this case, individual investors will get taxed at 12.5 per cent of the returns and corporates will get taxed at 20 per cent. This is the dividend distribution tax that is deducted by the fund company. Once this is paid, no further taxation applies to the income. Although this is obviously not as much of a tax advantage as the long-term capital gains option, it’s still a lot lower than the full tax payable on bank deposits.

The only question that remains is if they are as safe as bank deposits. In theory, they aren’t. Like any other mutual funds (and unlike banks), you could lose all your money in an FMPs. In practice, FMPs have been predictable and safe.

However, to enhance the overall yield FMPs may assume high credit risk and run the risk of default. Nowadays, the increasingly tight liquidity and credit situation could mean that some of the companies in which FMPs invest could be sailing closer to the edge than earlier. There’s plenty of talk about how some real estate companies are facing tough times. If an FMP has invested in such a company’s debt, the chances of an FMP returning less than the indicated yield or even turning in a capital loss cannot be ruled out completely.

Generally speaking, FMPs invest in high quality instruments, which have been rated by at least one credit rating agency. In case of investment in unrated papers, prior approval of the board of directors of the AMC or the Trustee has to be obtained. All things considered, even though FMPs are generally seen as something that only companies invest in, there’s no reason why individuals should not use them as more tax-efficient fixed deposits.

What are Mutual Funds?

A Mutual Fund is a trust that pools together the savings of a number of investors who share a common financial goal. The fund manager invests this pool of money in securities – ranging from shares and debentures to money market instruments or in a mixture of equity and debt, depending upon the objectives of the scheme.

Why to choose / invest in Mutual Funds?

Diversification: Funds are invested across different companies & different sectors which reduces the risk.

Anytime Liquidity: You can withdraw all or part of your investment any time at current NAV.

Transparency: Portfolio is available to Investors Quarterly / Monthly. You can see your money growing everyday through NAV.

Prompt Service: Account statements & redemption cheques are couriered within 4 days. Liquid Funds redemptions are effected within 24 hours.

Professional: Professional money management has long been available to large MANAGEMENT institutions & high networth individuals. Mutual Funds make this expertise accessible to everyone

Regulation: All Mutual Funds are regulated by SEBI, Board of Trustees & regular inspection by SEBI authorities.

Choice: A wide choice of Income Funds, Gilt Funds, Liquid Funds, Balance Funds, Equity Funds, Sector Funds, Tax Saving Funds, Index Funds.

Flexibility: Flexibility to transfer / shift your investment from one scheme to another.

Accessibility: Mutual Fund schemes are easy to buy any time & also available in convenient installments through Systematic Investment Plan (SIP).

Tax Free Dividends…….

1] The type of Insurance is Group Insurance Policy. The cheapest and easiest form of insurance policy available with any insurance company.

2] Only the 1st Holder is insured. So, in case, a couple subscribes to SIP +Insure then only one person can avail of the insurance benefits.

3] The Sum Assured, in case of death is not paid to the nominee, but shall go back to the scheme of the AMC(Reliance Asset Management Company). Remember, the scheme benfits more than the dependents of the deceased in case of death of the holder.

4] Huge exit load of 2% for discontinued SIP. If you agree to pay your SIP for 11 yrs but pay only for 10 long and tiring yrs, still the scheme charges you 2% for the remaining 1 yr which you do not wish to continue.

5] No insurance upto 90 days (exception to it is accident cases only) , i.e 3 months. In case of death within 3 months, except of accidental deaths, the scheme shall not pay the dependents a penny.

6] The dependents will end up paying the scheme 2% back if the death occurs within 3 months due to reasons other than accidental death.

7] Minimum period of investment is 3 yrs and Rs 2,000 for each installment, i.e totalling to Rs 36,000 for Group insurance worth less than 10 lacs.

There are group insurance polices availables at a very low costs, which can be availed of for insurance requirements. Insurance worth of Rs 10 lacs may or may not be sufficient for your entire family’s needs.

The Exit loads are relatively very high even if investor is paying his SIP for a long period, if he discontinues even 1 day prior, he ends up paying 2% Exit loads.

Sunny Side to life :

SIP is also available without this offer.

Source: – Mutual Funds online.

Happy Investing.!